PERSPECTIVES

Accenture reveals the top 10 challenges for investment banks in 2016

Digital technology presents challenges and opportunities for investment banks. Are you ready?

Bob Gach

Managing Director, Accenture Strategy – Capital Markets Lead

For the eighth consecutive year, Accenture’s Top 10 Challenges for Investment Banks series takes a closer look at the top issues facing the industry. Bob Gach shares highlights from our research and his personal insights on the findings.

If you had to name one theme from this year’s series, what would it be?
Digital technology. It can change everything—how investment banks operate internally, how they develop products, how they serve customers, how they have to attract and retain talent, and the kinds of competitors they face in the market. Digital strategy is now synonymous with business strategy.

Are regulatory compliance, capital adequacy and cost reduction still top priorities?
These issues remain on the agenda, but many investment banks are choosing to tackle them in new ways. Instead of taking a project-based approach to dealing with these challenges, organizations are systematically embedding them as disciplines in their business, operations and technology functions. It’s a subtle but powerful shift that could have a significant impact.

Will any of this year’s challenges be surprising to investment banks?
One of our challenges focuses on blockchain technology and distributed ledgers. It’s a topic that was barely on the radar last year, but we’ve seen it rapidly gain traction across the industry. Blockchains have the potential to help investment banks reduce total cost of ownership, manage system-of-record sharing, clear and settle transactions faster and automate certain electronic transactions. So it’s an exciting technology that C-suite executives should definitely be examining.

We’ve heard a lot about tech, but what about talent?
The two are actually quite closely related. Today, between 60 and 65 percent of employees are older than 40, so investment banks need to start thinking now about how to address this looming wave of retirement. Complicating this is the fact that new graduates are less interested in investment banking than they were a decade ago. Finding ways to retain the knowledge of aging workers, organize efficient workforces and attract millennial talent will be key challenges.